Economic and financial pressure is growing on the Burmese junta, which is facing a shortage of tax revenue and foreign exchange, even before the inflationary shock of the war in Ukraine is felt. To top it all off, an armed resistance commando attacked the deputy governor of the central bank, Than Than Swe. She was hit by several bullets at her home in Rangoon on Thursday, April 7, three days after the entry into force of a draconian foreign exchange policy which requires all dollars in circulation to be converted into local currency, the kyat. . This civil servant was appointed to this post by the military junta which seized power in a coup on 1er February 2021 and overthrew the elected government of Aung San Suu Kyi. An army spokesman said Tuesday, April 12, that she was recovering in a hospital.
The attack was claimed by the command of the military region of Yangon, a branch of the Burmese “army of shadows”, in charge of the economic capital and under the supervision of the parallel government set up by hidden politicians in the country, or in exile, to fight the junta. This guerrilla claims to be responsible, since September 2021, for attacks against 1,128 “targets” in the Yangon region, of which 443 are of an “administrative” nature, such as for the central bank – in the form of attacks, plastic attacks or assassinations.
Simple “executor” of decisions taken by the generals – the central bank has lost all independence since the coup -, Mme Than Swe was also known for having imposed on financial institutions across the country to sanction employees who supported the spring 2021 protest movement.
“Significant challenges, and for some insurmountable”
The imposition, made on Monday April 4, on all economic actors, individuals and companies, to convert within twenty-four hours all dollars in their possession into kyats at a fixed rate, approximately 8% lower than the unofficial rate , follows a series of measures taken since the fall of 2021 to counter the plummeting of the said kyat. This had stalled in September, then in October, before recovering to a level 25% lower than that of August 2020.
The measure of April 4 caused a further slide in the price of the Burmese currency. Not only does it risk encouraging individuals to keep even more dollars outside the banking system to exchange them on the black market, but it also frustrates foreign players. As of Wednesday, April 6, a dozen North American, European and Asia-Pacific chambers of commerce in Yangon published a joint press release warning of “significant challenges, and for some insurmountable”, to foreign operators in Burma, in particular ” in the absence of exemptions for foreign investors”. New foreign investments have dried up because of the sanctions, apart from those coming from China. However, many companies already present in Burma fear that their losses will widen a little more.
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